FAAC Revenue Rises to N6.28 Trillion in Q2 2024, Led by VAT and Customs Duties
In Q2 2024, Nigeria’s Federation Account Allocation Committee (FAAC) revenue reached N6.28 trillion, driven by substantial Value Added Tax (VAT) and customs collections. These sources contributed a significant 72.42% to the total revenue, underscoring a shift towards non-oil revenue sources.
Surge in Non-Oil Revenue
The Central Bank of Nigeria reported that non-oil revenue rose by 32.22% to N4.55 trillion from the previous quarter, surpassing government targets by 23.07%. Increased collections from VAT, customs, and independent revenue were key contributors.
Declining Oil Contributions
Oil revenue contributed N1.73 trillion (13.23%) to FAAC, falling 67.3% short of targets due to reduced oil production. Production averaged 1.27 million barrels per day (bpd), impacted by theft and pipeline vandalism in the Niger Delta.
Tax Reforms Spark Debate
The federal government’s proposed tax reform aims to shift the 13% derivation model to VAT, potentially benefiting VAT-generating states but stirring controversy among northern leaders.
With efforts underway to boost oil production, Nigeria anticipates further increases in FAAC allocations.
Source: NairaMetrics